The state Senate voted Tuesday night to approve the $136 billion spending plan. It sets aside a proposal for state universities to set their own tuitions. It also calls for cutting more than $1 billion in school aid.

The Assembly passed its budget bill in June.

In the end, Democratic Sen. William Stachowski of Buffalo, who withheld his vote since June to force action on a proposal to empower state universities, changed his mind. Instead of a law, the proposal became a nonbinding “framework” for continued negotiations. The proposal was intended to empower the State University of New York and City University of New York to have greater autonomy from Albany.

But the framework was enough to get all 32 Democratic senators to vote for the $1.75 billion revenue bill, the final piece of the budget. The budget increases spending 2 percent, or less than inflation, a fraction of the nearly 10 percent increase in spending a year ago in the first year of a fiscal crisis.

The 2010-11 budget completed Tuesday night includes a 5 percent cut — about $1.4 billion — in school aid and addresses a $9.2 billion deficit stemming from the fiscal crisis.

“Today we completed the final stage of a fair and responsible budget that works for New Yorkers,” said Austin Shafran, spokesman for the Senate’s Democratic majority.

Republican Sen. Stephen Saland of Poughkeepsie called it “one of the most slipshod and undemocratic budgets” ever passed by a state. Senate Republican leader Dean Skelos of Nassau County said the negotiations, in which Democrats excluded Republicans, were “totally dysfunctional” and resulted in too much spending and taxing.

Now that the budget is finally approved, lawmakers can begin to collect their pay withheld since the April 1 budget deadline. Each has had more than $30,000 in base pay withheld under the decade-old law.

The Democrat-led Assembly had already passed its budget bills in June at the end of the regular session.

In the end, even the three Democratic senators who withheld their votes to force discussion on the empowerment plan for SUNY and CUNY agreed to vote on the final budget bill. The empowerment bill would give the universities the power to grow, set their own tuition and enter into private partnerships to develop hotels and other projects.

“The empowerment is a huge disappointment,” said Sen. Neil Breslin of Albany County, one of the three. “But I’m not going to hold the budget up.”

The latest a state budget was adopted was Aug. 11, 2004.

“We couldn’t set a record,” said Sen. Stachowski. “We’ve given it five weeks.”

The 2010-11 budget totals about $136 billion, after Paterson vetoed about 6,700 spending items the Legislature added to Paterson’s approved budget proposal, including $190 million in pork-barrel grants for lawmakers to send to health, social service and civic groups in their districts.

The Senate and Assembly agreed, at Paterson’s insistence, on a contingency plan to deal with the possibility that $1 billion in promised Medicaid reimbursement won’t come from Washington. Starting in September, Paterson will exact across-the-board funding cuts and in December will provide a more comprehensive plan, with the Legislature’s input, to compensate for any lost aid.

The Assembly, Senate and governor also agreed to remove a new tax on wealthy hedge fund managers from Paterson’s budget proposal. Officials fear the tax would drive the managers and their big paychecks to Connecticut, a concern underscored by a public recruitment effort by Connecticut officials.

The Senate overwhelmingly approved Paterson’s property tax cap, although it has little support in the Assembly.

Paterson told WSYR Radio in Syracuse on Tuesday that if the Assembly doesn’t return to Albany in the coming weeks to consider the bill as promised, then he may compel them to Albany in October — the height of the election season — to consider whether to approve it or reject it.

“When 80 percent of New York’s residents want a property tax cap and (taxes are) literally driving people out of the state, that’s exactly what will happen if it isn’t addressed in later August or September,” Paterson said.

The budget bill passed along party lines, 32-28.

Major elements of the budget include:

–Eliminating the sales tax exemption on clothing and shoes costing under $110. The exemption would end in October, then return April 1, but exempt clothing and shoes worth $55. The $110 exemption would return April 1, 2012. That is supposed to bring in $330 million.

–Cutting in half the charitable deductions for New Yorkers making $10 million a year.

–Expanding the hours of the Quick Draw gambling game run by the Lottery Division, often in bars, and expanding the hours of video slot machines at race tracks.

–Delaying $100 million in business tax breaks.

(TM and Copyright 2010 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)